Hospitals say they're facing an existential crisis, and potential Medicaid cuts won't help
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U.S. Health and Human Services Secretary Robert F. Kennedy Jr. announced Thursday he’s laying off thousands of workers, including those who handle disease outbreaks and approve new drugs. The department is also consolidating many divisions. In response, the Minnesota Department of Health says $226 million in federal funding cuts will likely result in 150 to 200 layoffs of state employees and contractors.
Health leaders are worried about potential cuts to Medicaid and Medicare by Congress.
Dr. Rahul Koranne, president and CEO of the Minnesota Hospital Association, spoke with Cathy Wurzer about how recent job losses and federal instability could impact health care access for all Minnesotans.
The following conversation has been lightly edited for clarity. Listen by clicking the above player button.
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What’s your reaction to the HHS layoffs and department consolidations?
The main worry that I hear from health care leaders across the state is the uncertainty and how can we continue to provide access to Minnesotans and Minnesota families 24/7.
About 1.3 million Minnesotans are on Medicaid. What happens if there are cuts?
Who is that Medicaid patient? It is children, it is seniors, it is moms and new babies. Many live in rural and urban communities. Coming from a hospital and health care perspective, let me make this very real: Minnesota hospitals are in an existential crisis right now because 40% of Minnesota hospitals are operating in the red.
This is before even a dime or a cent of Medicaid is cut. The Commonwealth Fund just released an analysis that says any cuts to Medicaid could lead to $1.3 to 2 billion of cuts, which also includes up to 9,000 health care jobs and up to 17,000 jobs overall. It's a real issue that should keep our elected officials and all Minnesotans up at night.
The federal government is looking at ending telehealth for Medicare patients. What does that mean for Minnesota?
Let me again throw out one statistic, which is very important to know: on average, 64% of the patients that our hospitals are serving are on government insurance, Medicare and Medicaid. In some counties, that is up to 80%.
Medicaid and Medicare matter. They are lifelines for health care in Minnesota. So talking about telehealth, it is a very important program for how all age groups now get health care. It is so important for those seniors who are unable to travel and for people that may need specialty care that isn't available locally.
Telehealth is critically important, especially in 2024 when technology is advancing so fast, and so we are working hard to ensure that all the telehealth flexibilities are absolutely maintained.
Do Medicaid cuts trickle down more broadly for all patients?
If there are Medicaid cuts, and given that the hospitals are so dependent upon the Medicaid dollars to keep their doors open, they may be forced to make service closures. For example, if a mental health service is cut, or a labor and delivery service is cut, that service doesn't just disappear for Medicaid patients, it disappears for everybody in that community.
Correction (March 31, 2025): MPR News misidentified Dr. Rahul Koranne as a practicing doctor in the original headline of this story. He is currently president and CEO of the Minneosta Hospital Association.
